Vietnam – the “emerging star” of the regional manufacturing supply chain

Despite the outbreak of the Covid-19 pandemic, the processing and manufacturing sector in Vietnam is on the rise and has the potential to attract more and more foreign direct investment in the coming time.

Potential market

According to the Foreign Direct Investment Department of the Ministry of Planning and Investment, as of March 20, 2022, the total amount of newly registered capital, adjusted capital, capital contribution to purchase shares, and contributed capital of foreign investors. foreign investment reached US$8.9 billion, equaling 87.9% compared to March 2021. Meanwhile, realized capital of foreign-invested projects was estimated at US$4.42 billion, up 7.8 % over the same period in 2021.

Foreign investors have invested in 18 out of 21 key economic sectors, of which the manufacturing and processing sector leads with a total capital of up to 5.3 billion USD, accounting for nearly 60% of the total registered capital. . Next is Real Estate, Scientific and Technological Activities and Electricity Production and Distribution with registered capital of USD 2.7 billion, USD 200.4 million and USD 194.6 million, respectively. Although the number of registered foreign direct investment projects decreased slightly, the amount of capital disbursed tended to increase. This trend is still in line with Vietnam’s direction of attracting foreign direct investment in the direction of improving quality instead of increasing quantity, and at the same time eliminating small-scale projects that are not worth the added value. tell.

Mr. Bui Thanh Son – Minister of Foreign Affairs stated that attracting foreign direct investment capital is identified by the Vietnamese Government as a key action to promote socio-economic development. In this way, Vietnam has been making efforts to improve the business and investment environment, and at the same time, promulgate policies to encourage foreign direct investment in the country.
“Currently, the FDI sector contributes about 20% of GDP, over 50% of industrial production value and about 70% of the country’s export turnover, creating jobs and income for millions of workers. Many of the world’s leading corporations are making long-term investments and reaping many successes in Vietnam. Even if the consequences of the Covid-19 pandemic have had a negative impact on the world economy and Vietnam, attracting foreign direct investment to Vietnam still maintains momentum, demonstrating the belief and awareness of foreign investors. For international investors, Vietnam is a safe and attractive destination.”
Mr. Bui Thanh Son-Minister of Foreign Affairs
Vietnam continues to be an attractive destination
Vietnam’s manufacturing and processing industry continues to be an industry with high potential to attract foreign direct investment thanks to the advantage of cheap labor, favorable geographical location and many preferential policies, especially for high-tech products. On a global scale, Vietnam is a low-cost producer with competitive labor costs. In general, Vietnam’s labor cost is significantly cheaper than that of China or the US, while the cost of doing business in Vietnam is relatively economical, especially in the manufacturing sector, thanks to investment and construction costs. construction and low land.
In addition, Vietnam with a population of 100 million has a large and well-trained workforce. The Government of Vietnam has also implemented various vocational education programs to train skilled workers, especially the Strategy for Vocational Education Development for the period 2021-2030, with a vision to 2045. In addition, Vietnam’s signing of new-generation free trade agreements such as EVFTA, UKVFTA and CPTPP creates an attractive investment environment for foreign investors.
TechwireAsia predicts that “Vietnam will continue to be the region’s leader in manufacturing and processing, at least for the foreseeable future.”
The mentioned advantages are too attractive for foreign companies looking for opportunities to scale up production in Vietnam. In addition to “tech giants” such as Samsung or Intel, other large global corporations have also announced their commitment to increase production investment in this Southeast Asian country. Notably, Pegatron – a major manufacturing partner of Apple – Microsoft and Sony, has invested an additional $ 101 million to set up a factory to manufacture and sell computers, peripherals, communication equipment and electrical components death in Vietnam. Along with that, Pegatron also plans to invest in research and development (R&D). In addition, LEGO (Denmark) – the world’s most famous toy manufacturer – will invest nearly 1.32 billion USD to establish a toy production base in Binh Duong province.


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